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In observance of the Christmas Day federal holiday, the New York Stock Exchange and Capital Group’s U.S. offices will close early on Tuesday, December 24 and will be closed on Wednesday, December 25. On December 24, the New York Stock Exchange (NYSE) will close at 1 p.m. (ET) and our service centers will close at 2 p.m. (ET)

Market declines — A little history

Stock market declines are a natural part of investing, but they’re also the last things most investors want to experience. Here is some historical background to help you put market declines in perspective.

Types and frequency of stock market declines

Declines have varied widely in intensity, length and frequency. While in the midst of one, it’s been nearly impossible to tell if you’re seeing a slight dip in the market or the beginning of a more prolonged correction.
 

The table below shows how frequently declines in the Dow Jones Industrial Average have occurred since 1900. As you can see, while declines have varied widely in intensity, length and frequency, they have also been somewhat regular events.

A history of declines

(1900 – December 2013)

Type of decline

Average frequency1

Average length2

Last occurrence

Previous occurrence

-5% or more

About 3 times a year

47 days

October 2013

August 2013

-10% or more

About once a year

115 days

October 2011

July 2010

-15% or more

About once every 2 years

216 days

October 2011

March 2009

-20% or more

About once every 3-1/2 years

338 days

March 2009

October 2002

Source: The unmanaged Dow Jones Industrial Average

    Assumes 50% recovery of lost value
    Measures market high to market low

Past results are not predictive of results in future periods.


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Market perspective

Don’t forget the fundamental principles of investing, especially during difficult times.
 
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